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1 1 (January 4, 2024)

handle is hein.crs/govenxd0001 and id is 1 raw text is: Congressional Research Service Informing the IegisIative debate since 1914 Updated January 4, 2024 U.S. Arms Transfer Restrictions and AUKUS Cooperation On September 15, 2021, Australia, the United Kingdom (UK), and the United States announced an enhanced trilateral security partnership, named AUKUS after the participating countries. The partnership consists of two lines of effort, known as pillars: Pillar One is to provide Australia with a nuclear-powered submarine capability. Pillar Two is jointly to develop advanced military capabilities. Arms Exports Background U.S. participation in Pillar Two may require the transfer of items or information via Foreign Military Sales (FMS), a term that refers to the sale of U.S.-origin defense articles, equipment, services, and training (hereinafter referred to as defense articles) on a government-to-government basis. Such participation may also require U.S. government-issued export licenses for Direct Commercial Sales (DCS), a U.S. program for registered U.S. firms to sell defense articles directly to eligible foreign governments and international organizations. U.S. participation in AUKUS Pillar One is governed by different laws and regulations. (See CRS In Focus IF11999, AUKUS Nuclear Cooperation, by Paul K. Kerr and Mary Beth D. Nikitin, and CRS Report RL32418, Navy Virginia (SSN-774) Class Attack Submarine Procurement: Background and Issues for Congress, by Ronald O'Rourke.) The FMS and DCS processes are statutorily governed by the Arms Export Control Act (AECA; P.L. 90-629, as amended; 22 U.S.C. §§2751 et seq.) and the Foreign Assistance Act of 1961 (FAA; P.L. 87-195, as amended; 22 U.S.C. §§2151 et seq.). The Department of State administers the AECA through the International Traffic in Arms Regulations (ITAR; 22 C.F.R. Parts 120-130), which also establishes licensing policy for the export of defense articles and contains the U.S. Munitions List (USML), a list of controlled defense articles. The ITAR do not apply to FMS transactions. The Department of State's Office of Regional Security and Arms Transfers, in the Bureau of Political-Military Affairs (PM), oversees FMS transactions; DOD's Defense Security Cooperation Agency (DSCA) implements specific FMS cases. The State Department's Directorate of Defense Trade Controls (DDTC), also in the PM Bureau, issues and administers licenses for commercial sales. AECA Section 38(j)(1)(C) limits the scope of items that the United States can include in Defense Trade Cooperation Treaties, such as those described below. State Department officials have identified the role of the Defense Technology Security Administration (DTSA), which manages risks from the international transfer of defense technology and critical information, as particularly important for Pillar 2 activities. FMS and DCS transfers meeting certain monetary value thresholds are subject to congressional review. Section 36 of the AECA (22 U.S.C. §2776) requires the President to submit a formal notification of such transactions to Congress before issuing a Letter of Offer and Acceptance for an FMS transfer or an export license for a DCS transfer. The executive branch may not proceed with such transfers if Congress adopts a joint resolution of disapproval within an AECA-prescribed time period. In addition, 10 U.S.C. §8677 requires the transfer of any naval vessel that exceeds 3,000 tons or is less than 20 years of age to be specifically authorized by law. Section 1352 of the National Defense Authorization Act for Fiscal Year 2024 (NDAA; P.L. 118- 31) exempts exports of from the AECA Section 36 and 10 U.S.C. §8677 requirements. License Exemptions The AECA and the ITAR exempt certain exports from some licensing requirements. The AECA and the ITAR also authorize export license exemptions for certain projects undertaken pursuant to governmental agreements. Defense Trade Cooperation Treaties Defense Trade Cooperation Treaties, which entered into force in April 2012 and 2013 with Australia and the United Kingdom, respectively, exempt certain DCS transfers to (and retransfers among) approved communities of Australian and British end users from export licensing requirements. 22 C.F.R. Part 126.15 specifies that license applications for exporting defense articles to Australia or the United Kingdom will be expeditiously processed by the State Department in consultation with DOD. The ITAR also contains provisions governing exports pursuant to the treaties; these provisions include specific requirements regarding such matters as consignees, marking of exported items, and record-keeping. The regulations also detail congressional notification requirements covering exports pursuant to these treaties. These treaties may not cover all envisioned AUKUS technology cooperation because the treaties exempt certain defense articles from their scope. Moreover, the treaties currently cover fewer defense articles than when the treaties entered into force because, as a result of Obama Administration-initiated changes to U.S. export controls, the Department of Commerce now controls exports of those articles. U.S. regulations may permit only FMS transfers of some sensitive AUKUS-covered technology items. (See CRS In Focus IF12425, Defense Primer: International Armaments Cooperation, coordinated by Luke A. Nicastro.) anadian Exemption 22 C.F.R. Part 126.5(a) permits the permanent and temporary export of certain unclassified defense articles to Canada without an export license. Canadian recipients must be Canadian Federal or Provincial governmental authorities acting in an official capacity or a Canadian- registered person. Some ITAR requirements, such as

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